February 6, 2015
Keep TCL in Local Hands to Protect T&T and the Caribbean Region
The upcoming vote on the removal of the current 20% cap on share ownership by any one entity at TCL is crucial. If the current cap is removed the door would be opened for a company such as CEMEX to eventually attain majority share ownership in this local manufacturing company. In its own right the sale of local resources to foreign owners would have significant negative impacts for the local economy and by extension the Caribbean region. The OWTU’s position therefore is that this cap should not be removed so that our national resources are protected. However, the underlying reason for the current push to have the cap removed is of even greater concern.
As is public knowledge, TCL has been facing severe financial difficulties in the recent past under the leadership of the former Group CEO Rollin Bertrand. As a result, the company has been seeking out financing and one of its major financers is now the International Finance Corporation (IFC), a member of the World Bank Group. The removal of the 20% limit on share ownership is related to the loan conditionalities being imposed by the IFC on TCL. Opening the door for a foreign buyout will see Trinidad and Tobago suffering significant negative impacts. National ownership will be eroded, given TCL’s role as a regional player, the process of regional integration would also be affected, job cuts would be almost guaranteed and local stock market activity would be ultimately reduced. These issues are of no concern to the IFC, but must be of major concern to all Trinidad and Tobago citizens. Citizens therefore have a responsibility not to allow these negative outcomes to be realised.
Given the significant potential impacts of the removal of the existing 20% limit, it is important to know what the policy position of the Trinidad and Tobago Government is on this issue. What is the policy position which will be guiding state enterprises with shares in TCL? Surely the government cannot be in support of such a move.
Furthermore, the international market for cement manufacturing is dominated by a few large companies, one of which is CEMEX. If TCL was to be acquired by CEMEX, this would lead to a further concentration of wealth into the hands of a few large multi-national firms.
As explained above, it is in the best interest for Trinidad and Tobago and the Caribbean region for these assets to remain in local hands. Protecting the local manufacturing sector, promoting a vibrant stock exchange, protecting jobs and encouraging foreign exchange flows must not be trumped by the narrow interests of CEMEX and the IFC!
Chief Education and Research Officer